A federal rule was issued on October 16, 2019 giving taxpayers new options to settle their debts with the National Treasury (Provisional Measure No. 899/2019, known as MP 899).
The Office of the Attorney General to the National Treasury (“PGFN”) then issued an ordinance regulating the provisions of MP 899, by laying down the procedures, requirements and conditions for settling overdue tax liabilities at the federal level.
The innovation introduced by the PGFN ordinance is that taxpayers are now allowed to use the amount granted –to themselves or third parties – in special court orders – known in Brazil as precatórios – to amortize or even settle their debts with the PGFN.
In order to use any such precatório, the taxpayer must first formalize the transaction with the PGFN and enter into a Public Deed transferring to the PGFN the right to be paid the relevant precatório amount.
In addition, the transfer of the precatório amount must also be informed to the court which granted the precatório order, so that the relevant amount be credited directly to the PGFN.
In addition to the compliance with the provisions of MP 899 and the PGFN ordinance, this new option is to be granted at the PGFN discretion. Nonetheless, it is excellent news for those who are beneficiaries of precatório orders and wish to settle their debts with the federal tax authority.
